Dow Jones Industrial Average Tumbles Nearly 100 Points Ahead Of FOMC Statement; Twitter Inc (TWTR) Shares Drop 5%

U.S. stocks traded sharply lower Wednesday, with the Dow Jones Industrial Average tumbling nearly 100 points, after the U.S. economy was said to slow more than expected in the first three months of the year. Market professionals are turning their attention to a statement from the U.S. Federal Reserve on monetary policy, due out at 2 p.m. EDT.

The Dow (INDEXDJX:.DJI) tumbled 84.31 points, or 0.5 percent, to 18,009.38. The Standard & Poor's 500 (INDEXNASDAQ:.IXIC) fell 9.44 points, or 0.45 percent, to 2,105.32. The Nasdaq composite (INDEXSP:.INX) lost 27.64 points, or 0.55 percent, to 5,027.65.

The U.S. economy grew slower than expected in the first quarter, due to harsh winter weather, a strong dollar and a slowdown in shipping due to West Coast port disputes. The Federal Reserve will release a statement Wednesday afternoon on monetary policy following its two-day policy meeting, which investors hope will give further clues as to the timing of when the central bank will lift interest rates. Most economists anticipate a rate hike will happen in late spring or early fall.

“The GDP [gross domestic product] miss will absolutely affect the Federal Reserve today as they try to look through the report to see how much of the slowdown is related to underlying strength in the economy versus the winter weather and West Coast port slowdown,” said Luke Tilley, chief economist at Wilmington Trust.

The West Coast port slowdown had a dramatic impact on shipping because as dockworkers and their employers negotiated a new contract, the disruptions prevented manufacturers from receiving inventories in time, slowing production. For example, the Port of Los Angeles’ container activity, or the amount of products it shipped, tumbled 13 percent from the fourth quarter of 2014 to the first quarter of 2015, Tilley said.

“It’s a confirmation that the port dispute was certainly affecting GDP and hurting exports. The encouraging news is that activity surged in March, a month after the port dispute was resolved, showing us that the monthly trend is picking back up,” Tilley said.

Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, agrees. "The GDP number reflects weakness, but it may be premature to read too much into the data because I think you'll see a rebound in the second quarter as weather impacted consumer spending in the first quarter, and the strong U.S. dollar weighed on trade," Sandven said.

U.S. GDP, the broadest measure of goods and services produced across the economy, grew at a seasonally adjusted annual rate of 0.2 percent in the first quarter, the Commerce Department said in its preliminary estimate Wednesday. Economists had forecast the U.S. economy to expand at a 1 percent seasonally adjusted rate last quarter compared with 2.2 percent for the last three months of 2014, analysts polled by Thomson Reuters said.

The Nasdaq said Wednesday that Shareholder.com "inadvertently" released Twitter's quarterly earnings results ahead of schedule. Shares of Twitter Inc. (NYSE:TWTR) dropped more than 5 percent to as low as $39.75 in morning trading, a day after plunging more than 18 percent after the company's first-quarter earnings report was posted early. Although Twitter's quarterly profit beat estimates, revenue and mobile monthly active users both missed forecasts.

Meanwhile, shares of Lumber Liquidators Holdings Inc. (NYSE:LL) plunged 20 percent in morning trading after the retailer of hardwood flooring posted an unexpected quarterly loss, while sales in the company’s current quarter have so far tumbled 8.2 percent to $52.6 million. [The U.S. Department of Justice is pursuing criminal charges against Lumber Liquidators in connection with an ongoing investigation into some of its imports from China.]

The biggest laggard in the blue-chip Dow was UnitedHealth Group Inc. (NYSE:UNH), falling 3 percent, while Visa Inc. (NYSE:V) was the largest gainer, up 1.5 percent.